Chicago Tribune | March 11, 2016

Letter: Airbnb skirts Chicago’s hotel regulations
Chicago Tribune | Kerry Bartell, president, Community Associations Institute, Illinois Chapter
March 11, 2016

Landlords responsible for one of the fastest growing segments of Airbnb’s Chicago revenue are not renting out their homes on the occasional weekend to earn a few bucks as some observers suggest. High-powered landlords now can earn six figures off of largely unregulated — and in many cases illegal — hotels. They hide behind Airbnb’s “sharing” platform to dodge taxes, skirt the law and flout basic health and safety standards.

A Pennsylvania State University study with funding from a hotel industry trade group found that nearly 30 percent of Airbnb’s revenue comes from users who list units for rent full-time and offer multiple units for rent. In Chicago, full-time operators make up about 2 percent of Airbnb landlords, but generate 24 percent of the company’s local revenue.

Researchers discovered an explosion in the number of landlords renting two or more residential properties, a segment that generates more than half a billion dollars in revenue for Airbnb. In Chicago, these “multi-unit operators” account for over 15 percent of landlords and drive 38 percent of the company’s revenue.

Almost all Airbnb Chicago units are illegal operations because about 95 percent of units are unlicensed. And yet Airbnb turns a blind eye. Instead of working on licensing compliance, the company eagerly pursues additional partnerships with the largest apartment developers. The total city of Chicago Airbnb inventory is now equivalent to 17 large hotels.

The victims of this “new economy” are the Chicagoans who live in condos and neighborhoods where Airbnb units are ubiquitous. A revolving door of renters in otherwise stable and peaceful residential buildings creates a myriad of issues including security and noise.

City government can no longer ignore the trend of unscrupulous people using platforms such as Airbnb to run unregulated commercial hotel businesses in residential buildings. The solution is common-sense regulation that includes licensing of all short-term rental units that are not primary residences.

Licensing provides condo associations and other groups with the information required to safely manage and police their buildings. Condo owners will never tolerate bad neighbors. It’s the job of Chicago aldermen to close the illegal hotel loophole.